Buy side

The municipal market should see an uptick in primary volume this week, led by a Texas auction of $9.8 billion Rans, meet a still-robust level of demand. Potential volume should total $6.79 billion, up from total sales of $4.77 billion last week.

Moody's Investors Service is considering across-the-board and targeted downgrades in California in the aftermath of the state's recent municipal bankruptcies.

Hedge fund Bridgewater Associates, with support from the state, will construct a new headquarters in Stamford, Connecticut Gov. Dannel Malloy announced.

After the arrival of last week's bounty, outflows of $1.61 billion left tax-exempt money market funds with $272.34 billion in total net assets for the week ended Aug. 13, according to the Money Fund Report, a service of iMoneyNet.com.

Inflows to municipal bond mutual funds slipped this past week. But they remained hearty, at $964 million of inflows from weekly reporting funds.

Standard & Poor's has a stable outlook on the municipal solid waste sector.

Individual investors like the higher payouts they have seen in long-term muni bond mutual funds, and so have been pouring more money into them in 2012 than they have in years.

Bond insurer Syncora Guarantee Inc. sued to challenge California measures dissolving local redevelopment agencies, saying they jeopardize bond payments and impair bondholder and insurer rights.

Standard & Poor's downgrade of the United States government a year ago earlier this month has had a wide but shallow impact on municipal bonds.

JPMorgan wants California's Peralta Community College District to make good on a type of refinancing that may now be illegal, according to a complaint filed Monday.

Throughout 2012, high-yield muni funds have seen some of the best total returns among bond funds, with consistent inflows. Still, some industry watchers warn of large risks for the sector.

Investors poured into muni bond mutual funds at a rate not seen in five months.

Morgan Stanley analysts point to several factors that can lead to municipal bankruptcies.

New York investment banker CastleOak Securities, L.P. has hired a co-head of municipal finance and two new fixed income sales professions.

Defense Secretary Leon Panetta's confirmation that new rounds of military base closures would not happen in 2013 benefits privatized military housing as a credit, rating analysts say.

New York State Comptroller Thomas DiNapoli announced the appointment of Vicki Fuller as the new chief investment officer for the $150.3 billion New York State Common Retirement Fund.

The municipal market, sliding leisurely through its slow season, anticipates a slight uptick in issuance the week of Aug. 6. Industry estimates hold that muni bonds expected to be sold during the week should total $6.35 billion, versus a revised $5.93 billion last week. Then, the market waded through a sluggish week in the primary and secondary that did little to yields, which continue to hover near record lows.

State governments have had a major role in how municipalities deal with fiscal distress, says HJ Sims director of credit analysis Richard Larkin.

Stockton, Calif., is proposing to temporarily cut personnel costs by 6.6% while permanently cutting payments on the Assured-insured pension obligation bonds by 83%, the company said.

Flows to municipal bond mutual funds fell this week, but they still remain positive. The market saw a sluggish week of mostly stagnant yields and mixed interest for product in the primary and secondary markets. Muni bond funds reported almost $504 million of inflows from funds that report their flows weekly for the week ended Aug. 1, according to Lipper FMI. They have seen inflows for 16 consecutive weeks.